GM, hours away from bankruptcy, eyes comeback

• Source: xinhua
• [20:54 June 01 2009]
• Comments

GOVERNMENT CONCERN

Yet, the possible revival of the auto giant is not without risk. Negotiations with the union and bondholders, supposedly vital to the success of the GM's restructuring plan, were directed and pushed by the Obama administration's task force on auto industry.

With 19.4 billion dollars already lent to the GM and another 30-billion-dollar aid in the pipeline, the US government will be the largest stake holder, getting about 60 percent stake of a new GM.

The fact that the GM will no longer be independent worries many.

Keith Crain, publisher and editorial director of leading auto industry magazine Automotive News, was among the first to come up with the auto company's new nickname "Government Motors."

"I am very concerned about it," Crain said, "None of those in the auto task force had ever run a company before. None."

The Obama administration ousted GM ex-chief executive Rick Wagoner and intended to change the majority of the board.

But officials cautioned that the US government has no intention of nationalizing the GM and will not be intervening in its day-to-day operations.

"The government has no desire to own equity stakes in companies any longer than necessary, and will actively seek to dispose of its ownership as soon as practicable," senior administration officials said in a media briefing in May.

"The goal is to promote strong viable companies that can become profitable quickly and contribute to economic growth and jobs without government involvement."